Ep. 121: Wes Battiste – Anesthesia: Building an In-House Team
Here’s what to expect on this week’s episode. 🎙️
Having an in-house anesthesia team at a surgery center used to be extremely rare. However, with all the staffing shortages and reimbursement hurdles, bringing anesthesia in-house might be the only way to remain profitable.
Wes Battiste, Avanza Healthcare Strategies, joins us this week to discuss how to do so successfully.
Here are a few of the takeaways Wes shared:
Better OR Utilization – Tailored staffing improves efficiency, flexibility, and scheduling coordination.
Financial Transparency & Optimization – In-house anesthesia means better control of revenue cycle, fewer bad debts, and stronger payer negotiations.
Stronger Recruitment + Retention – First-person referrals from existing staff and a culture of ownership make a big impact. Some centers are even offering equity to anesthesia providers.
Start with a Feasibility Study – Just like launching a new ASC, run the numbers. Look at your volume, payer mix, staffing model, and goals.
For more tips or to hear the full conversation, find “This Week in Surgery Centers” on your favorite podcast platform or YouTube.
Episode Transcript
[00:00:00] Welcome to this week in Surgery Centers. If you are in the ASC industry, then you are in the right place every week. We’ll start the episode off by sharing an interesting conversation we had with our featured guest, and then we’ll close the episode by recapping the latest news impacting surgery centers.
We’re excited to share with you what we have, so let’s get started and see what the industry’s been up to.
Erica: Hi everyone. Here’s what you can expect on today’s episode. West Baptiste is a seasoned anesthesiologist and a SC developer. He’s done it all from opening centers to consulting to m and a, and he’s on today to talk about how you can build an in-house anesthesia team. The industry dynamics between surgery centers and anesthesia providers have changed drastically in the last five to 10 years, and there was a time when the idea of a surgery center having their own.
Employed anesthesia team seemed crazy, but now it’s [00:01:00] becoming the only solution for some centers to remain profitable. After my conversation with Wes, we’ll switch to our data and insight segment. Today I want to cover data from spine centers specifically. We’ve got 10 key metrics to cover, some encouraging, some a bit concerning, but all highly interesting and actionable.
Before we jump in, though I have some exciting and bittersweet news to share. After almost three years of running and hosting this podcast, it is time for me to hand over the reigns. I have loved every minute of hosting this week in surgery centers, especially getting to meet with and learn from so many a SC leaders.
But I have decided to take the leap and change career paths a bit. And go all in on growing my nonprofit. So my chapter at HST and with this podcast will come to a close at the end of the summer, but fear not. We have put in a tremendous amount of time searching for the perfect [00:02:00] host to take things over, and you’ll actually get to meet her this episode.
Over the next few weeks, I’ll be transitioning out and Alex Ald will be transitioning in. She is fantastic, super smart, and I know all of you will love her. You’ll get to hear her this episode as she’s the one who interviewed Wes. You’ll also start to hear from Grant Duncan. He’ll hold some interviews as well moving forward.
He has a bunch of industry knowledge and always asks the most insightful questions, so you’ll be introduced to him too in the coming episode. I know change can be hard, but it can also be really exciting. And honestly, I’m stoked to just get to become a listener of the podcast moving forward. So thank you all for being such an amazing audience, and for the second to last time, I hope everyone enjoys the episode.
And here’s what’s going on this week in surgery centers.
Alex: [00:03:00] Hey Wes, welcome to the podcast. Can you tell everybody a little bit about yourself and how you got started in the a SC industry?
Wes: Of course, Alex and, uh, thank you H HT Pathways this week in surgery centers for having me on. Uh, my experience is about 40 years in healthcare. Uh, 19. I began as a respiratory therapy tech at Emory Hospital as an undergrad.
10 years later, I finished anesthesia school There. In 1991, a decade of doing anesthesia, and in 2000 built my first surgery center from the ground up, and 2010, a second, 2020, a third, uh, since then, that also included the anesthesia, uh, practices associated with those a SC entities. And since then, the last few years have mainly involved in advisory work on both the A SC and the anesthesia practice side.
Everything from m and a to feasibilities, to turnarounds, um, and now with anesthesia, quite a bit of work with, um, just the modeling. And I’ve been doing most of that work and now exclusively with Avanza Healthcare Strategies. So that’s where I’m at.
Alex: [00:04:00] Great. And thank you so much. I’m actually really glad we were able to get you on the podcast because as we’re about to get into the industry dynamics between surgery centers and anesthesia providers have changed drastically since COVID.
It used to be very uncommon for an A SC to have their own in-house anesthesia team. Especially if there was only one or two ORs, but now that’s becoming a real viable option for people. So I would love to talk about your experience there and what prompted you to build an in-house anesthesia group instead of outsourcing?
Wes: I think from the very beginning, the benefits were obvious. This is 25 years ago. First of all, it’s a mindset shift because anesthesia historically has been. Service and it’s outsourced contractual entity such as pathology or radiology. But to integrate and to collaborate with the a SC, the benefits were just, for me, were obviously in the beginning now, they are substantially, uh, more beneficial, but the integration and just it creates an or [00:05:00] utilization metric that’s easily managed.
Your staffing, you can tailor it to the needs, not just in hours, but also in skills and preferences in those pieces. For the A SC uh, and then the rc, the revenue cycle becomes obviously very transparent and there’s just inherent benefits in that integration. Anesthesia usually is not able to collect a prepay from a patient.
They’re not privy to the insurance verification from the surgery center or the hospital outpatient department side. So the patients are balanced, billed. It’s integrated into the a FC. Your insurance verification is transferred to the anesthesia practice. Prepays are collected, bad debts reduced, uh, patient collections are improved.
The benefits were inherent from the beginning,
Alex: from a recruitment and, uh, retention perspective. How does that work when you’re looking to bring somebody in-house and have them be on your team full time?
Wes: You’re, you’re. Biggest value there is to utilize your a SC provider, your partners, your medical staff, or your surgical staff.
But for their referrals, you get first person referrals versus [00:06:00] with, uh, locums that you don’t know who you’re getting or what you’re getting. Um, right. And so that’s the first step. And that’s how we worked. So they, the recruiting was really best referral base are the people who are already there and, and who they know.
Uh, and then second to that, you know, the, the. The retention. And in this market, that’s challenging ’cause everybody’s offering another dollar an hour or another $10 an hour. And I think that really comes from the relationships as, as as well. You wanna create a culture, culture of caring that, that make people want to work there.
Most clinicians somewhere in them, the money drives ’em, but they did this for a reason, they did that ’cause they really do wanna care for patients and they really value an authentic environment where that happens. And so just creating that culture, uh, makes it a place that people want to work and, and then you’re able to retain them.
Just as your, or nurses and your, or techs, you would not consider just farming that out to a service. You want them to feel a part of the team. You know, a lot of people now in that model are considering equity for their anesthesia providers just to create that true sense of ownership in a SC to integrate ’em even further.[00:07:00]
Alex: Absolutely. That’s a great point about the cultural benefits. I imagine that it’s a very different type of job, you know, being in a surgery center versus working in a hospital versus another care setting. What are. Some other benefits for, for a practitioner to work in an A SC,
Wes: generally the a SC, it’s controlled hours.
You know, the historic model is Monday through Friday, seven to three. That’s evolved. Some with ASCs, some people are extending hours. There are some folks doing Saturday hours. Um, there’s still is an element of control. You know, when you walk in the morning, your schedule, it may be a long schedule, but that is the schedule.
You’re not gonna finish at four o’clock and the ER’s calling that there’s a, you know, ruptured aneurysm that you need to hang out and to take care of. That level of acuity is less so it can be a, a little bit less stressful environment. The pace is quicker. Um, but it also ends up being, I, again, that environment is different.
It’s just very different. It becomes the physicians, especially if you have a syndicated center who are partners there, their attitudes are different, uh, when they’re an owner versus just a, a utilizer. I circle back, the environment has been really key to 25 years of, of [00:08:00] successful in anesthesia. And a SC you know, because I have one liners because I can’t remember a paragraph.
So I use one liners. Uh, I have one that says people make the place. Good people make good places. It tends to be the old, as you know, birds of feather flock together. The more good people you have, the more good people you attract, which on the A SC side, you the benefits are just so obvious. You start to align your goals between your A SC and anesthesia.
You obviously have that control over staffing and whether it be scheduling for or optimization utilization. And then you have full transparency, you get some budget optimization ’cause you got full transparency in the financial matters. So all the financial matters. And if you’re in a situation which five years ago was not common, now it’s very common whether there’s a stipend or an income guarantee, um, you have full transparency into that.
And those stipends and income guarantees are, are not real good incentives for either the anesthesia providers to staff well or the revenue cycle to do a great job of collecting because the money’s gonna come either way. Um, so when you take control of that, it’s a huge optimization. And maybe it doesn’t do away with this stipend or income [00:09:00] guarantee, but it, it must assuredly in all the models that we run and we do this, it surely reduces it.
Alex: Absolutely. Yeah. Could we dig into that a little bit? The financial operational benefits of this model? What other ways do you see ASC benefiting operationally?
Wes: So for ASCs, we have to staff our room. So of times the hospital has a room they can’t staff, they just stack, they stack the cases to after hours.
We don’t have really after hours in an a c. So our model of our rooms and our schedule. And so by bringing it in house, again, that control over the staffing, but also that retention I talked about, right? Providers don’t tend to come and go quite as quickly. I circling back and back, creating that environment that they, they feel valued.
So again, it’s a mindset shift. They’re, they’re not just someone coming in providing a service. They’re actually valued part of the team and their integrated into the team. Their input is valued and how, how we staff with four providers, but we’ve got five rooms. How do we do this? And that worked between the, or the, the scheduling between anesthesia.
Cases are good. Our adage in surgery centers, our cases are good. Volume is the number [00:10:00] one metric across all surgery centers, payers, payer rates, payer mixes, all those things. Uh, case acuity, case mixes, but you, the volume is the key driver. So how do we accommodate the volume? And the biggest bit is, is that there becomes some element of control over that.
And again, there are CM is huge because managed care rates, oftentimes if you have an independent anesthesia group, they’re not able to negotiate very well or have much leverage for your commercial payers. Whereas in a SC, you’ve created more leverage. You’ve created a another entity that now already has contracts with Blue Aetna, Cigna, United, Humana, and they can leverage that on the provider side to hopefully instead of say, $40 per unit, they can leverage to $50 per unit.
And those are just direct pass throughs to that bottom line to offset that stipend income guarantee or to become profitable.
Alex: Yeah, exactly. Exactly. What are some of the challenges? We’ve talked a lot about the benefits, but when you’re bringing somebody in-house, obviously now they’re gonna be an employee, they’re gonna be part of the staff.
With that comes the need for time off vacation, that sort of stuff. How are you mitigating [00:11:00] against some of the, the challenges and risk of bringing the team in-house?
Wes: Yeah, so I mean, it ends up being a risk benefit, uh, decision, but. And we do a lot of this modeling and through our advisory work, and, uh, there’s obviously a financial risk if you’re on the hook for their salaries, that oftentimes we don’t look at W2 roles.
A lot of anesthesia providers, like the 10 99 rule, they’re able to then maintain their self-employment status, but yet it’s a 10 99 guaranteed, 10 99 rule. You know, you have to step around those rules and make sure you’re compliant there, um, by a W2 versus a 10 99. Uh, that takes some of the challenges out.
’cause as a W2, you, obviously there’s all the hr, all those compliance and all those benefits and all those just quality measures that you have to meet in a W2. So oftentimes we recommend a 10 99, a full-time ten nine. Mm-hmm. Or a part-time 10 99. And that takes some of those risks out from the HR side, but you also have.
Obviously some compliance and then now you have quality reporting for anesthesia as well. So there are some operational, wouldn’t call ’em headaches, but there are some additional operational challenges that, that someone has to manage if [00:12:00] you own it. You know, that’s not third party anymore. So someone has has to manage that.
Um, and then the other challenge is if you bring it in-house, you do then have to go get those rates. You do, they have to go get those managed care contracts, you know, it’s not through. Someone else, you know, now you own those rates and now you go back to negotiating with payers for rates or commercial payers.
So that’s the other challenge. But being what we usually see is that’s more of an advantage, a challenge on the front end, but more of an advantage on the back end.
Alex: That makes total sense. So in terms of staffing, when you’re bringing the anesthesia team in house, you raised a good point that I hadn’t thought about.
You have additional compliance, other things that you need to manage now having an anesthesia practice. What other staffing considerations are there around that? Are there other people you need to hire? Other part-time roles? What does that look like?
Wes: So the beauty of that is that most of those pieces are already in play and generally you already have a biller, you have an insurance verifier, uh, which anesthesia did not have prior.
Uh mm-hmm. You know, you have a collector and you also have the biller is able to, when they [00:13:00] bill for Dr. Jones’s knee arthroscopy. Behind that, they’re able to submit the same claim for anesthesia. So you have a speed to bill too. You’re reducing days and receivables. ’cause it’s not having to then be transferred.
Usually what happens with an outsource, um, after it’s bill, the anesthesia record transferred to the billing company, they have to code, they have to do their pieces. So there’s a three to five day lag. So you’re reducing that revenue cycle. So those pieces are already in place. If you know, you already have an HR department, you already have someone over payroll.
Most of the infrastructure is already there in the a c it’s, uh, it’s generally. Fairly seamless, uh, with the exception of just how, what employee model are you putting in place and then your payer rates and then your managed care side. Those to me are the, the two bigger challenges that, that we face if we, if we’re going to bring it in-house.
Alex: That makes total sense. And that actually, uh, leads really nicely into my next question. So if I’m an A SC and I’m evaluating whether this is for me, what do you recommend? I do? What is kind of my first step? [00:14:00]
Wes: It starts with, I call it a feasibility study just like we do if you were wanting to build a surgery center and we really need to come in, look at a feasibility study, run an impact analysis, and see again, make it numbers, make it number data driven.
Have another one liner. Numbers don’t lie, but they don’t tell the whole story either. ’cause. So there are also indirect benefits, but, but we need to look at the data side. And so a feasibility study just to run through everything we’ve talked about. If we bring this in, what does that look like? How will it impact our bottom line?
And that bottom line could be related to, we can accommodate more volume or we can increase the revenue side for anesthesia X, Y, Z. Um, just to look at all the, those metrics and see what that impact is. That’s the first part. The second part is, uh, are we able to go out and find the staff, uh, that we would need for anesthesia with, again, with first person referrals, you know, with our staff or who’s already here.
Would they consider transitioning to that model with us and becoming a part of the center, not just retail, not just to consumer. Would they be want to be a part of this answer? Is oftentimes yes, especially with some of the folks now considering equity [00:15:00] roles. Anesthesia’s always been kind of carved out of an equity role in an A SC, but now I think the importance to what they deliver, uh, there’s value.
So a lot of people are considering limited equity roles for them. And then the third thing to consider is whether or not you do this as a hybrid. I’ve done this, one of my centers, there was an anesthesia entity. Already had rates and I partnered with them. I owned it, but I, but I partnered with them. Much like AOCs will partner with a management company, but, but not a 51%, you know, a limited equity, but you take some of those benefits.
So there’s lots of advisory work there, but it always starts with just that feasibility. Is this right or not right? Is it a green light or red light?
Alex: That makes absolute sense from a timeline perspective to operationalize implementing this model. I don’t have an in-house team, but I want to have an in-house team.
This is my goal. About how long would that take me to build typically, if I’m going through this feasibility study starting there?
Wes: So, yeah, the feasibility work can happen pretty quickly. You know, it just over a, a couple of months, it’s, it’s mostly data [00:16:00] driven. So, uh, you know, a month or so to complete a feasibility and, and then the variables and for the timeline become the staff who, and then the managed care side.
Because you really want to try to address that on the front end. Anesthesia used to arrive on an outta network basis, but with a transparency act and everything else in place outta network that doesn’t work the same, it’s it’s not good for your patient experience. It’s not good for your a c ’cause they come back and complain to your a c that they got this unexpected bill from the anesthesia.
So addressing the managed care that possibly can be the most rate limiting factor is addressing that on front where you, before you actually contractually make this happen.
Alex: That makes sense. So it’s a good heads up for anyone who’s considering going down this path for sure. Are there any other thoughts you have on that topic?
Any other words of wisdom for people considering this model or any other model really to try to get away from some of the challenges that we’re facing right now with anesthesia and ASCs?
Wes: So I go back to, um, I started my first [00:17:00] surgery center and I, uh. I was a clinician, I wasn’t a businessman. And so I had a very simple approach and I still try to promote that approach and just kind of revolves around authenticity and it’s just keeping you eye on the prize.
And so what is the prize? And the prize in our, in our world, healthcare is not supposed to be ebitda. You know, supposed to be taking good care of moms, dads, brothers, sisters, daughters who are having outpatient surgery. And so just keeping your eye on that and doing that really well. My mindset was if I develop the very best product out there, it’s gotta work.
25 years later, it works really, really well. And you know, the EBITDA follows it in a very successful way, but we can kind of get that backwards. And so my advice is, is truly I love the ability to try to scale that because it gets lost, it becomes a business, but it’s still healthcare. And so it’s a little different.
So the focus on the prize, investing in people, I said it before, people make the place good. People make good places. And, and the way you do that is when more people do what you do, not what you say. You’ve gotta be the one that cares if you’re the admin, the CEO, if you’re the [00:18:00] nurse manager. And if you’re the MDA, the anesthesiologist, if you’re the medical director, show ’em how to care and, and they’ll follow what you do, not necessarily what you say.
So that’s, that’s love that, that’s my advice.
Alex: That’s great. That’s great. And, and on the topic of advice, if I could get some more words of wisdom from you for our listeners, every week we like to ask, uh, the people we have on as our guests, if you could give people advice on one thing they can do this week.
To improve their surgery centers. What tip would you give everybody out there?
Wes: One thing on your busiest day this week, if you’ve got, if your busy day is 20 cases, or your busy day is 50 cases and your busiest day this week, go around, I call it pat and butts and kissing babies. Go cheer, cheer, lead your folks.
Tell ’em how hard, tell ’em you recognize how hard they’re working, you value them. And then buy lunch for your center, your busiest day of the week. Just see how far it gets. Just see what it does for you. It’ll do wonders.
Alex: I love that [00:19:00] the culture of caring not just for your patients but for your staff as well.
You can’t go wrong there.
Wes: Exactly.
Alex: Well, Wes, it has been such a pleasure talking to you about building in-house anesthesia teams, anesthesia in general, the state of ASCs. But, uh, we really appreciate your time and hope to have you on Again. Thank you so much.
Wes: Thank you, Alex. I really appreciate it.
Alex: Awesome.
Erica: HST Pathways recently released 12 benchmarking reports with each report, taking a deep dive into one single specialty at a time, comparing data from 2023 to 2024. Using our own unique data set from our clients, we were able to extract data points so that anyone in the industry could compare themselves to their peers.
Two quick disclaimers. We only pulled data from clients who gave us permission, and we omitted any extreme outliers. So today I want to look at data from spine centers specifically, and this data was pulled [00:20:00] from over 131,000 cases across 300 centers from 2023 to 2024.
So the first up is, or block utilization spine centers saw a dip in or utilization from 25% down to 23%. Now, this is an important, an important one as always, because underused or time is a silent cost killer and a specialty with complex resource intensive cases like spine. Low utilization, not only signals inefficiency, but can also stifle case growth and revenue potential.
The benchmark and many top performing specialties hovers closer to 50% or higher with 70% always being the goal. So 23% is both a red flag, but also an opportunity. The next is pre-auth rates. So on the right side, pre-authorization approvals jumped from 38% to 47%, which is a major win. Why? Because denials [00:21:00] and payment delays often stem from incomplete or missing pre-auth.
This improvement suggests better workflows or payer tech adoption, and that trans translates directly to cleaner claims and fewer headaches post-op. Insurance verification rates held steady at 80%. So no change here from 2023 to 2024, but that’s not necessarily a bad thing. You know, an 80% verification rate sets a stable foundation for reimbursement and operational readiness.
But that said, many GI and uh, CV or cardiovascular centers are now hitting verification rates in the high eighties to low nineties. So spine still has some room to grow here.
All right, let’s talk cancellations. So case cancellation rates nudge down slightly from 22.7% to 22.2%, which is a move in the right direction. But spine still has one of the highest cancellation rates of any A SC specialty. [00:22:00] The real kicker is that a staggering 9% of cancellations were due to insurance related issues.
That’s more than double the industry average of 3.6%. So that’s a clear call to action for better pre-surgical financial clearance and communication between front office and billing teams. On the financial side, some mixed signals. Patient deposit collection rates rose from 65% to 67%. It’s a modest gain, but in an era where out-of-pocket expenses can derail access to care, every percentage point matters.
Transparent estimates and digital payment tools seem to be paying off meanwhile, days to bill. Improved centers are now billing on average in eight days instead of 10. That’s crucial for cashflow, and a two day gain is nothing to overlook. It reflects stronger EHR integration, better coding discipline, or hopefully both.
But here’s a concern. Claim denial [00:23:00] rates. So denials increase from 9% to 10%. It might sound minor, but each denied claim is a delay in revenue and a potential write off as the, uh, as claim volume grows, so does the impact. So combine that with reduced or utilization, and we’re looking at a potential margin issue here.
And speaking of margins, net revenue per case took a hit. It dropped from $6,854 to $6,255, which is an 8.7% decline. So that’s a big one with inflation rising supply costs and higher labor demands declining per case. Revenue can’t be ignored. And finally, case volume. The average center saw a drop in spine procedures from 65 cases to 60, so overall fewer cases, less revenue, lower utilization.
This trend isn’t isolated. It [00:24:00] may reflect broader challenges like referral leakage, patient hesitation, or network shifts amongst payers. So what’s the big picture? The data tells us that spine ASCs need to double down on surgical scheduling, efficiency, payer coordination, and reimbursement strategy. If you’ve run a spine center or spine is in your specialty mix, now’s the time to refine your tech stack, revisit case workflows and consider patient education that reduce cancellations and improve collections.
And that officially wraps up this week’s podcast. Thank you as always for spending a few minutes of your week with us. Make sure to subscribe or leave a review on whichever platform you’re listening from. I hope you have a great day, and we’ll see you again next week.